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Months after discontinuing the remaining business of Centurion Casualty Co., Wells Fargo & Co. has agreed to sell the Iowa-domiciled company to an affiliate of UnitedHealth Group Inc. in a transaction that, due to strategic changes by the bank over the past decade, carries greater symbolism than financial significance.

An application for a change in control of the insurer filed with the Iowa Insurance Division indicates that Specialty Benefits LLC, a unit through which UnitedHealth offers dental, vision, hearing and financial protection products, will pay cash consideration of up to $12.2 million to acquire Centurion Casualty as a clean shell. The regulator posted notice of the transaction on Dec. 5.

Centurion Casualty was perhaps best known as a provider of involuntary unemployment insurance to customers of the former Wells Fargo Financial business. It also assumed certain policies at various points in time from subsidiaries of Countrywide Financial Corp. and Assurant Inc. Wells Fargo Financial in 2010 engaged in a broad-based restructuring that included ending branch-based consumer lending operations.

The insurer's direct business volume peaked in 1999 at $16.8 million in premiums written. Its net business, which includes premiums assumed from third parties, topped out at $36.5 million in 2008.

Centurion Casualty's direct business had all but evaporated by the time it served notice to remaining customers in February 2018 that it was canceling outstanding policies. It still reported $9.5 million in net premiums written in 2018 as the company terminated reinsurance agreements related to two blocks of assumed business later in the year.

The Iowa regulator approved the company's request earlier this year to upstream an extraordinary dividend of $40 million; its $6.2 million surplus as of Sept. 30 reflected that action. The dividend payment reflected a desire to "right-size" the company, Centurion Casualty said in its 2018 annual statement. The regulatory approval served as a precursor to Wells Fargo's pursuit of the sale.

Centurion Casualty was never a large part of Wells Fargo's once-significant insurance operations, but its sale represents the latest step in the bank's multiyear process of pulling down its presence in insurance. More material insurance-related divestitures by Wells Fargo include the 2016 sale of its crop insurance managing general agency to Zurich Insurance Group AG and the 2017 sale of its brokerage and employee benefits operations to USI Insurance Services LLC.

The Wells Fargo holding company reported a combined $280 million in noninterest income from insurance and reinsurance underwriting and other insurance activities through the first nine months of 2019, down 12.5% year over year. Its trailing-12-month tally of $389 million represents just a fraction of the $2.13 billion the bank reported in those line items for full year 2010.

Wells Fargo declined to comment on the divestiture.

The shift is part of a broader reversal of the financial services convergence thesis that brought many banks into insurance distribution and insurers into the depository realm in the late 1990s and early 2000s. Not only have banks relinquished their previous role as leading consolidators of insurance agencies, they also have scaled back their presence in insurance underwriting, and vice versa.

The number of individual property and casualty, life and health insurance entities that in their quarterly and annual filings indicated that they are subsidiaries of bank holding companies regulated by the Federal Reserve Board plunged by 58% between 2012 and 2017 to a total of 50 companies. That number ticked up to 53 at year-end 2018 and 58 as of Sept. 30, 2019, reflecting the formation of new subsidiaries of Ohio Farmers Insurance Co. and Mutual of Omaha Insurance Co., as well as a series of actions taken by Ameriprise Financial Inc. to significantly expand the scope of its banking operations.

However, pending and completed M&A deals will cause the number of insurance companies whose parents are subject to Fed regulation to soon decline to 49. A CIT Group Inc. subsidiary agreed in August to acquire Mutual of Omaha Bank in a transaction expected to close in the first quarter of 2020; Mutual of Omaha Insurance Co. has eight life and health insurance subsidiaries. Ameriprise in October completed the sale of former auto and homeowners unit IDS Property Casualty Insurance Co. to the group that includes American Family Mutual Insurance Co. S.I.

Aggregate noninterest income from insurance and reinsurance underwriting reported by bank holding companies, commercial banks and thrifts, excluding United Services Automobile Association, totaled $1.86 billion for the trailing 12 months ended Sept. 30, down from levels in excess of $3 billion as recently as 2015.